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2014 End of Session Report

Recording Fees - Pursuant to the Pennsylvania Uniform Condominium Act (UCA), and the Uniform Planned Community Act (UPCA), all amendments to a declaration must be recorded.  Unfortunately, what has historically been an administrative act at minimal expense, has become a large financial burden.  A number of counties have implemented a requirement to index each amendment against each parcel number in the condominium or planned community.  And, for indexing amendments against each parcel number, these counties have adopted a “per parcel” fee.  In Montgomery County, for example, the fee is $10.00 per parcel.  Accordingly, an amendment to a 250-unit Association will cost, at a minimum, $2,500.00.  Many other counties around the Commonwealth have adopted similar fees. Such fees are not only absurdly high; they bear no relation to the work required to record documents.  Moreover, as recording is a legal requirement, such fees could prevent associations from complying with the UCA or the UPCA.  CAI is currently working on legislation to bring filing fees down to reasonable levels and to prevent counties from imposing these exorbitant charges. This issue is pending introduction for 2015.

Planned Unit Development Data Collection Act- CAI opposes this Bill. SB 1302 was introduced on March 26, 2014, by State Senator Folmer and referred to the Senate Urban Affairs and Housing Committee.  As written, the Bill would drastically alter the Uniform Planned Community Act’s existing requirements for meeting quorums, create legislative inconsistencies regarding the adoption of budgets and imposition of fines, and create unnecessary pitfalls to hinder an association’s ability to collect assessments. The legislation proposes unworkable solutions to non-existent problems. The Act authorizes an association board to levy fees (assessments) through an annual budget process. Section 5303 (b) of the Act requires that notice of the adoption of the annual budget or approval of a capital expenditure be delivered to each Unit Owner promptly after such approval; and furthermore provides that the Owners may vote to reject same. Section 5302(a)(11) of the Act requires that fines and penalties be preceded by notice and an opportunity to be heard. To require that assessments, fines and penalty amounts be approved by the membership at an annual meeting is thus unnecessary, and inconsistent with existing consumer protection provisions of the Act. Furthermore, such a change would seriously impact an association’s ability to maintain the revenue necessary to cover the expenses of managing the community. The bill failed upon adjournment.

Planned Unit Development Data Collection Act - CAI supported HB 1688. On July 2, 2009, the Pennsylvania House of Representatives passed HR 350, which directed the Joint State Government Commission (JSGC) to study the impact of Common Interest Ownership Communities (CIOCs), commonly referred to as planned communities, on the Commonwealth and its local governments. The JSGC study, completed in December 2011, provided critical data, insight and recommendations. One key finding of the JSGC study concerns the absolute lack of information on CIOCs across Pennsylvania. While it is estimated that 2.8 million PA residents are in a CIOC and that roughly 80 percent of new housing starts since 2000 are CIOCs, the actual number and location of these communities is, by large and far, unknown. HB 1688 would mandate the collection of data including information such as name, physical location, land area, lot size, number of units, location, infrastructure age, and articles of incorporation or other non-profit organization registration information filed with the Department of State. The bill failed upon adjournment.

State Tax Deduction for Association Assessments - CAI supported HB 551. The bill would allow a unit owner in a common interest ownership community (planned community) to deduct 75% of his or her association assessments (or dues) from his or her personal income tax.  The purpose of this legislation is to address the problem of residents of associations paying taxes for municipal services that are often not provided to them. The bill failed upon adjournment.

Association Records and Meetings - CAI's PA LAC objects to certain provisions and supports amendments to HB 319 / HB 1254 / SB 557.  These Bills address open meetings and open records in common interest ownership communities.  CAI strongly agrees that the sharing of information and access to documentation are essential components of proper functioning of community association governance.  However, there are laws and rules already in place that ensure openness and that unit owners have access to the records and documents of their community association.

There are two fundamental, and erroneous, assumptions which appear to be the underpinnings of this legislation: that associations are all the same and that associations are similar to municipalities. A thorough review of associations in the Commonwealth of Pennsylvania would reveal that neither assumption is accurate and the adoption of this legislation, in its current form, will likely have several unintended consequences that will adversely impact the ability of associations to function properly. Issues including the availability of meeting space, availability of minutes within a defined period of time, use of recording devices and enforcement provisions will have a chilling effect that will discourage volunteers from serving on boards of community associations. For these and other reasons, CAI sought amendments to the bills. They all failed up adjournment.

Withdrawal/Conversion of Real Estate Within Flexible Planned Communities - CAI's PA LAC sought an amendment to SB 859 and HB 1122. The Bills amend the Uniform Planned Community Act and the Uniform Condominium Act to replace the current 7-year limitation on withdrawal or conversion of real estate within flexible planned communities with either a 10-year limitation (for projects that do not have a phasing plan) or a limitation based on the approved phasing that is submitted by the developer to the municipality.

Both the Uniform Planned Community Act and the Uniform Condominium Act provide that control of the board of a planned community or condo must be turned over from the developer to a unit owner-elected board no later than the sale of 75% of the units within the development, or seven years after the conveyance of the first unit in the development, whichever first occurs. CAI seeks to amend the language to clarifies that these Bills make no changes in the period of declarant control. The amendment supported by CAI states:

The foregoing amendments to Sections 3206(2), 3219(a), 5206(2) and 5219(a)(3) of Title 68 of the Pennsylvania Consolidated Statutes shall specifically apply only to those Sections; and shall not apply to, or alter any other Sections of Title 68 of the Pennsylvania Consolidated Statutes, including, by way of example and not limitation, Sections 3303, 3411, 5303 and 5411.  All other time periods listed in Title 68 of the Pennsylvania Consolidated Statutes are therefore unaffected hereby.

The foregoing language was accepted by the bill's sponsors and included in the current version of the Bills, therefore, CAI had no objection to the Bills.

House Bill 1122 was adopted by both legislative chambers and signed by the Governor on July 2, 2013.